Sao Paulo property sales down 38% in October

According to Secovi-SP (via Estadao), sales ofnewhomesfor October in the city ofSão Paulofell 38% from September and34% compared to October last year.

The totalof new homes sold (2,017 units) was less than thenumber of units newly launched (3,215). The number of units launched dropped about 40% over the same month in2010.

Increasing Supply…

Secovi-SP’s report also shows thatthe rate ofsales-to-supply(VSO) was 11.9% in October, which was down from18.7% in September and 23.5% inthe samemonthprevious year.TheVSOmeasures the relationshipbetween the amount ofunits soldand the total market supply (units for sale) in that specificmonth. Given thisscenario, Secovi-SP estimates thatthe number ofunits soldin 2011will be 20% lower than2010 sales.

Industryleaders try toexplain it (without much success or clarity)

In a statement,chief economist atSecovi–SP, PetrucciCelsosaid that themarket profilehas changed. “Property developers have been focusing on upper-middle class units, which reduces the supply ofunits per development.”